RMI 2101 Study Guide - Midterm Guide: Multiple Exposure, Fire Hydrant, Job Sharing

• School: Temple University
• Department: Risk Management and Insurance
• Course: RMI 2101
• Professor: Michael Mc Closkey

Document Summary

Activities or attempts to control the risk. Stop engaging in the activity that causes loss. Never engage in activity that causes loss. Risk reduced to zero if properly implemented. Ie: person a won"t fly on airplane to avoid risk of crashing. Avoidance may not be feasible or desirable. Loss profits associated with the activity (opportunity cost). Might not avoid costs from the past. Usually when there is a high frequency, high severity claims. One of the three types of financial consequences. When cost of risk > benefit (profit) from the acitivity. Strategy is mutually exclusive with respect with all other options. Attempts to reduce the frequency or probability of the loss. May or may not produce severity (goal is to impact frequency!) Loss prevention is like the byproduct of . Activities that attempt to interrupt or break the chain of events that lead to loss. Ie: training programs, safety inspections, quality control checks, security guards.